Final Leg...

...in the inflation race has my third runner, oil handing the baton to our closer. It is "core" inflation. This is the Federal Reserve's bureaucrat. He has a huge lead over the trailing "2%" contestant. We got our runner from the inflation portal. His length of eligibility will be determined at a later date. We did a little digging into our closer.

Basket of Goods...

is the school of economics where he studied. His grades for accreditation do seem questionable, however no one challeges this point. His training comes from a mission statement that says, "Core inflation is the change in the costs of goods and services. It does not include food and energy sectors. It is calculated by using the consumer price index (CPI). 

This CPI is constantly being changed. Manipulation is a better word. The latest change is to drop the cost of a new motorcycle into the formula. In the past, car insurance was dropped along with bus and train fares. The calculations favor national average pricing to reach a conclusion. They do their research on monthly and quarterly time schedules.

What is included?

They mention food, but add a disclaimer. They use food "related" items. They find average pricing for clothing, transportation, housing, electronics, apparels, education, medicine, et al. Then, they assign a percentage for each to reach their estimate of inflation. They also only use the percentage change on a year over year (yoy) data. They can change the end result by substituting a quarterly report over a monthly or the other way around. They are bureaucrats. Their job is to make government look good or they may end up as a statistic on the BLSs for unemployment. They are not alone. They get the media and "hired" economists to back their conclusions. In addition, the missing two elephants from the list, food and energy. This is political corruption by both political parties. Back to the race...

...Our core inflation runner is crusing to the finish line. Our "timer" of the race gives us the results. Writers are already addressing their concerns. People, like John Williams of Shadow Stats are pushed aside. We get the same old, same old story lines from the same shill writers, "Inflation is peaking! The 2% made up ground in the final leg of the race. We should discount the results of food and energy. Housing will stabilize with higher rates. Core inflation was not really tested. We expect a closer race in the future." 

Here are our results. First leg, housing showed record pricing for both new and existing homes. Rents are up 19% on a yoy basis. Our second runner, food is up across the board. Pricing for diary is up. Beef is up. Vegetables are up. Frozen foods cost more due to the rise in utility rates. In addition, transportation costs are up which is a cost that eventually gets into play. The supply chain problems as well as packaging, metal (can) costs and carboard all will make food more costly in the future. When the Fed eventually lies that inflation has returned to the 2% target, they will not mention that the new higher pricing remains. The producers of food will either raise their pricing as we mentioned in the past or go back to the old playbook: smaller amounts in package with the old price. Our fastest runner, oil needs no description other than the false one use by the Fed, government and "hired" economists. They claim that oil "only" rose 48% yoy. We use our math that says 80% is the real price increase. Finally, we come to our portal runner. Core inflation is listed at 8.5%. We will let them use their stats. Our time for the race, although not a record, is a close second. Shelter/housing is up double digits. Food is up double digits. Energy is off the charts. It is racing toward 100% increase. Core inflation could even hit double digits with COVID resurfacing. It is why we always say, "Save for a rainy day." We remind you that the road to a better democracy begins by Ending the Fed!  Peace.